Hey, just so you know, this blog post will take you through the Day Trading Basics and whom it may or may not be for. Ps: It is not meant to be technical nor will it teach you how to trade. Okay?
Day trading is the concept of trading during a day period, going by the time the market opens and closes, with a mindset of buying stocks that will move upwards (obviously, lol). The main focus is to make small amounts daily by entering and exiting in the same day.
This daily process enables the trader to enter, exit, profit and even reinvest all in the same day, without the overnight worries of the other types of trading. And collecting several small gains can add up to great profits, and for this reason many see this as a “get rich quick” method of trading.
The entire trading is based out of speculation looking into charts and its patterns within a day period to know when to enter and when to exit, so learning technical analysis is the first thing you should look into.
The Youtube platform offers day trading courses, technical analysis and everything you need to know and learn about day trading, so you shouldn’t have to pay to learn to read charts.
When day trading cryptocurrency there is the advantage of a 24/7 period market, as in opposed to the stock market that opens and closes daily, even though there are platforms that offer afterhours stock trading , but most do not. And then there are platforms that offer cryptocurrency markets like Forex operating 24/7.
About Forex: https://www.forex.com/en/
One very important thing to keep in mind is the cost of day trading. Day traders pay a good sum to commission, so a daily trade has to focus on making enough to pay for commission and make a profit.
Experienced traders focus on Security Selection, determining entry points, finding a price target, and determining placements for stop loss.
In case you need help with trading terms check out Investopedia which is a resourceful website containing every term you may need help with within the industry.
Liquidity is the availability of liquid assets to a market or company (via google dictionary); with that said, it is something traders look for to know when to enter or exit at the price desired according with the market.
Volatility is the liability to change rapidly and it is very important because it shows traders all the drastic movements of a market and with that all the possibilities of scoring a profit. (Definition via google dictionary)
Scalping is a trading strategy used in Day Trading, it is a much more feverish trading style, they act on high speed, entering and exiting the market several times during a day period. Scalpers aim to make several small amounts of money that turn out to be profitable when added up.
Stop-Loss is an order placed to automatically exit a trade once it reaches a certain price limit loss, mainly a day trading technique used for short-term tradings or investments.
Limit Sell is an order placed to automatically exit the trade, buy a stock, once it reaches a certain higher price. Traders and investors use this type of order to stop them from purchasing an overpriced stock, or crypto.
It is crucial for traders to be psychologically prepared especially in times of losses. Understanding that losses are a part of the trading business is very important for it is one of the reasons many traders fail, they become psychologically or emotionally affected chasing after making up for losses and end up in a risky situation usually losing more money.
Day trading is for the pragmatic, not for the emotional.
Practice, practice and practice.
Learning to trade is consistent hard work and studying technical analysis, the charts and patterns are a must.
Coins2Learn is a digital coin trading simulator where you can practice. They give 10,000 digital currencies to practice within their platform.
How cool is that? This may be the best way to start day trading cryptocurrency.
Day Trading chat rooms are also very resourceful and popular amongst traders. You can create a network, meet experience traders and even find a mentor.
Keep in mind, many people decide to quit day jobs to start trading, but Day Trading is not for everyone eventually 95% of traders fail according to biddegree.org.
Day Trading is a risky job that must be done diligently, because and it will affect your finances directly, and it will demand an awful lot of your attention and time.
And last but definitely not least, never spend any more then you can afford to lose! (This is the cryptocurrency mantra, isn’t it?)
Now I have a question for you…
As we have seen above, Daytrading is supposedly known as a get-rich-quickly type of trading, which may attract people with all sorts of debts and financial instability.
With that in mind: Do you believe some level of financial stability should be a “requirement” per se, when choosing to be a day trader?
Let us know in the comments!